Alberta Budget 2015 – A measured approach to a ‘radical’ budget

FOR IMMEDIATE RELEASE March 26, 2015

Alberta Budget 2015 – A measured approach to a ‘radical’ budget

CALGARY, Alberta —The Government of Alberta tabled its much anticipated 2015/16 budget today. In advance of the budget, the provincial government had warned that “tough, disciplined fiscal decisions” would need to be made to address the anticipated $7 billion revenue shortfall, framed as both a “revenue and a spending challenge.” This was to be a radical budget for which the Government would need to seek a new mandate.

The 2015 budget addresses this in a measured approach, by holding spending, increasing revenues by $1.5 billion, and using substantial contributions from its contingency fund to buffer the impact of next year’s budget. The budget’s proposed changes to personal income tax, and the nature of the new health care contribution levy indicates a move towards a more progressive tax regime, with a sensitivity to protecting lower-income Albertans. In addition, Albertans will see increases in user fees, fuel tax and ‘sin’ taxes.

The Government promised that the cuts would not be made on the backs of vulnerable Albertans. The Ministry of Human Services’ budget did not see any wholesale program eliminations, however the budget’s $69 million (or 1.8%) increase is in effect a net reduction due to population growth and inflation. To some extent the budget reflects reduced caseloads (for example in child intervention). However, due to the current economic situation, there may also be increased demand in other areas such as income and employment supports. Minister Campbell signaled the continuation of a heightened focus on systems change for Human Services when he stated “we must not be afraid to eliminate or reduce programs and grants that no longer achieve results.”

The Government also sent strong messages aimed at reducing expenditure growth in major departments – Health, Education and Post-Secondary Education. The budget reductions in these areas are magnified by the expectation that they will absorb additional increases in service demands. Organizations have been forewarned to “lean down” their administration in advance of coming cuts, and this year’s budget illustrates that this is a permanent shift.

In Culture and Tourism, significant decreases were felt by the Alberta Historical Resources Foundation, Alberta Foundation for the Arts, and in the area of Recreation and Physical Activity. The Government also reduced the Charitable Tax Credit from 21% to 12.75%, its 2006 level, reducing the incentive for individuals to donate to Alberta charities. We are disappointed that the budget reflects a continued erosion of support for community-based organizations and fails to recognize the importance of these organizations to the strength of our communities, economy and Albertans’ quality of life.

This is an election-year budget, and while it may seem like the “tough” decisions were not as tough as many in the nonprofit sector imagined, in this year and the coming years, we will see flat or diminished funding. This budget and projections the for the coming year put a lot of stock in the transformation of service systems and service outcomes to contain expenditures. ­

CCVO will continue our in-depth analysis of the impact of the budget on the nonprofit sector. Visit www.calgarycvo.org for updates.